Eli Lilly Officially Sues Canada For 'Lost Profits' Because Canada Rejected Eli Lilly's Patents

from the incredible dept

A few years ago, we noted that Eli Lilly was facing some hard times, in large part because it had focused its entire business model around getting patents, and many of those patents were expiring, and very few new ones were in the pipeline. Even so, it was still rather surprising earlier this year to see Eli Lilly claim that Canada owed it $100 million for undermining the company’s “expected future profits” by rejecting an Eli Lilly patent. The Canadian court reasonably felt that it shouldn’t give Eli Lilly a patent on something that wasn’t determined to be useful. Normally, if a country doesn’t give you a patent, you move on. However, Eli Lilly used a questionable part of NAFTA, the so-called investor-state dispute resolution mechanism, to argue that Canada was “expropriating its property,” and thus demanded compensation — starting at $100 million, which it then raised to $500 million.

A few weeks ago, Eli Lilly’s CEO wrote an op-ed piece, claiming that by not granting his company a monopoly, Canada was “suffocating life-saving innovation.” That’s wrong. And it’s obnoxious. For years we’ve covered how the pharmaceutical industry has actually used patents to hold back life-saving innovations by locking them up, blocking advances, jacking up the price to absolutely insane rates, and by using a variety of other questionable practices (including patenting historical folk medicines). But, more importantly, every country gets to determine what is and what is not patentable. For Eli Lilly to use trade policies to effectively try to negate Canada’s patent validity standards is a blatant attack on Canadian sovereignty.

And now the official case has been filed and Eli Lilly is basically demanding that $500 million because Canada decided that an Eli Lilly drug wasn’t worth a patent.

Keep this in mind as we discuss the Trans Pacific Partnership (TPP) agreement and the upcoming EU-US trade agreement TTIP/TAFTA, because companies are asking for similar dispute resolution mechanisms, and this could become a big, big deal. Remember how New Zealand recently has put in a law that should mostly ban software patents? Imagine if Microsoft and others suddenly started trying to sue that country for “lost profits” because it won’t give them patents on their software.

Filed Under: , , , , , , ,
Companies: eli lilly

Rate this comment as insightful
Rate this comment as funny
You have rated this comment as insightful
You have rated this comment as funny
Flag this comment as abusive/trolling/spam
You have flagged this comment
The first word has already been claimed
The last word has already been claimed
Insightful Lightbulb icon Funny Laughing icon Abusive/trolling/spam Flag icon Insightful badge Lightbulb icon Funny badge Laughing icon Comments icon

Comments on “Eli Lilly Officially Sues Canada For 'Lost Profits' Because Canada Rejected Eli Lilly's Patents”

Subscribe: RSS Leave a comment
That One Guy (profile) says:

This could be good actually

If canada loses here, or even has to fight hard, it would hopefully make other countries take a good, long look at any treaty/trade agreement that includes similar investor-state dispute language, as something like this makes it very clear such ‘deals’ make it so the profits of companies are considered to be of higher importance than laws or even sovereignty of countries.

Anonymous Coward says:

Re: This could be good actually

Since politicians live or die by lobbyists and the lobbyists represent people who already know that profit is above national laws, it is not so cut and dry.

No matter the result of the case, there will be more push on ISD since it can now be claimed to be necessary. The only question is if the fight is for harsher language (Lilly loses the case) or forcing the provisions on every future deal (Lilly wins the case).

bigpicture says:

Re: This could be good actually

Since when did the US government or its Corporations ever respect the sovereignty rights of other nations. Especially where there are greed interests such as oil etc.

The US is not a nation that is self reflective, no more than playground bullies are self reflective. The ploy is self righteousness, the end justifies the means is the spin. We are special and the other guys are the villains who are victimizing us. OH WAIT, that was also Hitlers message “we are a pure and special race and these Jews are villains who are hurting us” So that gives us the right to invade and pillage.

This is what Putin is trying to point out if anybody is listening, be self reflective and ask the question why does the rest of the world see the US as a bully? Why does the US have to protect itself from terrorism in the first place, why is it always a threatened victim?

solidyote (profile) says:

Re: Re:

That might be hard to do for some.. Given that Lily has monopoly on some drugs that were allowed in Canada for treating some illnesses.

If there aren’t alternatives, or if alternative drugs don’t work for some, it could hurt a lot of people.

That’s a really nasty business..

We allowed them patents and enforced them on our people for their own benefits. And then they use it to create something we need, and begin bossing us around with legal threats..

That One Guy (profile) says:

Re: Re: Re:

Hmm, actually, that brings up a possibility, win or lose a way for Canada to show that companies can’t just order it around would be to do something similar to India, where they have mandatory licensing for knock-off and generic versions of much more expensive drugs.

Drug companies hate it for obvious reasons, the public loves it, also for obvious reasons, so that would probably be a great way to send a message to any other companies that feel like they are ‘owed’ profits in a country and try to enforce their entitlement through a broken system.

Anonymous Coward says:

more than anything, this begs the question, ‘Where did this dispute resolution mechanism’ originate? who thought of it first? who tried to get it incorporated into these totally false but always billed as vital ‘Trade Negotiations’? on top of that, how long will it be before some companies then take this to the next level and completely cease to do anything except sue countries and governments for ‘lost profits? how long before we start seeing countries go completely bankrupt because they are forced to pay out exorbitant amounts of money to companies over these type of ludicrous law suits? how long before there are millions more on the poverty ladder because countries have had to increase taxes to such ridiculously high levels, no one other than the mega rich or very successful companies can pay the rates? how long before countries have to stop innovating and advancing because they simply cant afford to pay the sums expected in these type of law suits?
i hope that the various courts see sense here before there are some extremely serious back lashes and that these particular ‘additions’ present atm in the un-public TPP and similar Trade Negotiations are REMOVED NOW and FOR GOOD!

Togashi (profile) says:

If they win, I should start a company whose sole business model is to ask Eli Lilly for money. My expected future profits will be the $100 million that I will ask for from them. By not giving me that money, they are undermining my expected future profits, so I will sue them. When it gets to court, how can I lose when they won with the exact same argument?

Ninja (profile) says:

At the very least locking culture behind copyrights still leaves a wealth of public domain behind and doesn’t threaten lives. Now preventing people from getting access to stuff that would mean the difference between life and death is despicable. Suing a country that did it right? Well, they can go rot in hell as far as I’m concerned. Chris Dodd almost looks like a selfless, devoted to charity man running an organization of saints.

Add Your Comment

Your email address will not be published. Required fields are marked *

Have a Techdirt Account? Sign in now. Want one? Register here

Comment Options:

Make this the or (get credits or sign in to see balance) what's this?

What's this?

Techdirt community members with Techdirt Credits can spotlight a comment as either the "First Word" or "Last Word" on a particular comment thread. Credits can be purchased at the Techdirt Insider Shop »

Follow Techdirt

Techdirt Daily Newsletter

Techdirt Deals
Techdirt Insider Discord
The latest chatter on the Techdirt Insider Discord channel...